Yuksel announces restructuring terms, noteholders to be paid in full

New York, May 10 – Yuksel Insaat AS announced that it has reached agreement on terms of a debt restructuring with an ad hoc committee of noteholders owning 53% of its $200 million of senior notes due 2015.

Under the proposed transaction, noteholders will be receive full payment of principal and interest unless the early redemption option is exercised.

The principal amount of the notes will be reset to $209.5 million plus accrued interest of 9½% from Nov. 10, 2015.

The maturity of the notes will be extended to Nov. 10, 2019 subject to amortization of $40 million on May 10, 2018, $45 million on Nov. 10, 2018 and $50 million on May 10, 2019.

For the first year, the revised cash coupon of 9½% will be on a “pay as you can” basis subject to the company and its restricted subsidiaries maintaining a total minimum unrestricted cash balance of $20 million. If not paid in cash, the coupon will be 2½% cash and 7% paid in kind.

After the first year, the coupon will be payable in cash except that one semi-annual payment may be made as 2½% cash and 7% in kind at the company’s option.

Yuksel will have an early redemption option that will allow it to settle the amount owing in full for $150 million at any time before Nov. 30 and for $150 million plus capitalized interest at 9½% on the $150 million from Dec. 1, 2016 to May 31, 2017.

The restructured notes will have a mandatory repayment provision requiring 100% of cash proceeds up to $40 million and 70% of cash proceeds in excess of $40 million from the development of certain of the company’s real estate assets in the Çubuklu region of Istanbul, and 100% of the net cash proceeds from the development of the Yuksel Holding AS’ real estate asset in the Çubuklu region of Istanbul to be placed in a separate offshore account. Funds from that account will then be used to repay the notes at par plus accrued interest on a quarterly basis.

The ad hoc noteholders’ committee will appoint a non-executive member to the board of Yuksel Holding.

Various covenants are included in the agreement along with requirements for disclosure. Yuksel will also give a security package to the notes including a pledge over Yuksel Holdings’ shares in Yuksel Insaat and a guarantee of the note obligations by Yuksel Holdings.

Yuksel said it intends to implement the restructuring as soon as possible via a scheme of arrangement.

Yuksel Insaat is a construction company based in Ankara, Turkey.

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